Enforce and Protect Act
If you’re involved in the import or export business, then you need to be aware of the Enforce and Protect Act (EAPA). This act empowers the Customs and Border Protection (CBP) to investigate whether any company has evaded anti-dumping and countervailing duties.
The EAPA is a multi-party and administrative proceeding that is very transparent. The concerned parties can participate in the investigation and find out about the outcome. The EAPA also maintains a due process for parties to the investigation. This is done by providing an option for them to request administrative and judicial reviews of CBP’s determination as to evasion.
Since it was launched, the EAPA has accomplished the following:
– Launched 131 investigations
– Conducted over 30 distinct foreign on-site visits or verifications
– Identified over US$600 million in AD/CVD duties owed to the Government
AD/CVD Duty Evasion
The Enforce and Protect Act is a law that helps to prevent and penalize companies or individuals who attempt to avoid paying duties on imported goods. The act covers both anti-dumping (AD) and countervailing (CV) duties, and applies to any shipments entering the United States.
There are several ways in which someone might attempt to evade these duties, including simple negligence, false reporting, or transshipment. In some cases, attempting to avoid AD/CV duties can be as simple as inaccurate classification or failing to provide valid reasons for oversight of an import program. More complex evasion techniques may involve misreporting the country of origin of goods at the time of entry, or distributing goods from a third country after minor processing or repackaging.
Regardless of the method used, it is important to note that AD/CVD goods remain in scope regardless of the origin of the shipment. This means that anyone caught attempt to evade these duties can be subject to penalties, even if the goods were only processed or shipped from a third country.
The Enforce and Protect Act (EAPA) is a law that allows the U.S. Customs and Border Protection (CBP) to investigate allegations of evasion of anti-dumping and countervailing duties (AD/CVD). The CBP gets 15 business days to make a decision on whether to investigate the case. This is done through its Trade Remedy Law Enforcement Directorate (TRLED). The CBP will then start the investigation process if there are reasonable suggestions in the allegation that evasion has taken place.
The CBP is required to implement interim measures within 90 calendar days of initiating an investigation if they think there is a reasonable suspicion that evasive activity has occurred. These may include things like bonding requirements, entry restrictions, and audits. The purpose of these interim measures is to prevent further dumping or subsidy while the investigation is ongoing. They also help to ensure that any evasive merchandise doesn’t enter the U.S. market and that any potential dutiable Merchandise isn’t released until appropriate duties are paid.
The CBP will gather information through site visits and voluntary submissions. The investigation is a tedious process and may include requests for import documents, production records, and corporate/financial information. If the party fails to cooperate or comply with the investigation, the CBP may apply an adverse inference.
The CBP will make a final determination within 270 days of initiating the investigation. If they find that evasion has occurred, they will issue an order that requires the payment of duties, as well as penalties and interest. The order will also require the importer to take corrective measures to ensure that the evasion doesn’t happen again in the future. If the CBP finds that no evasion has occurred, the investigation will be terminated and no action will be taken.
If you are dissatisfied with the CBP’s decision, you may file an appeal with the Department of Commerce (DOC). This appeal must be made within 30 days of the CBP’s final determination. The DOC will then review the case and make a determination within 60 days. If the DOC agrees with the CBP, the determination will be final. If the DOC doesn’t agree with the CBP, they will send the case back to the CBP for further review. The CBP will then have 15 days to make a new determination.
After the Department of Commerce makes its final determination, the losing party may seek judicial review in the U.S. Court of International Trade (CIT) within 30 days.
Allegations of suspected evasion can be made by anyone through the public E-Allegations portal of the CBP. An ideal EAPA allegation must have the following information:
The person submitting the allegation (Allegers) must provide their name, address, email, and telephone number.
The name of the company that is suspected of evading AD/CVD duties; foreign companies that may be involved in the evasion; U.S.
Customs brokers, freight forwarders, or other third parties that may be involved in the evasion; and the names and contact information of any other individuals who have knowledge about the evasion.
A description of the merchandise that is covered by an AD/CVD order and how it is being imported into the United States (e.g., via ship, airplane, truck, rail).
The applicable AD/CVD order(s).
Evidence that suggests there is a reasonable possibility of evasion of an AD/CVD order. This may include, but is not limited to, purchase orders, sales invoices, packing lists, and bills of lading.
CBP will not investigate an allegation if it is submitted more than one year after the date on which the alleged evasion occurred.
What Happens After an Allegation is Submitted?
After an EAPA allegation is submitted, it will be reviewed by a CBP analyst to determine if there is enough information to warrant an investigation. If the CBP analyst believes there is enough information to warrant an investigation, they will refer the case to the TRLED. The TRLED will then decide whether or not to initiate an investigation. If they decide to initiate an investigation, they will notify the company that is being investigated and provide them with a list of the documents that they will need to submit.
It should be noted that the CBP may also initiate an investigation on their own if they have reason to believe that evasion has occurred.
Filing an EAPA Request for Investigation
The Enforce and Protect Act (EAPA) allows people to ask for an investigation by U.S. Customs and Border Protection (CBP) if they think someone is avoiding paying taxes on goods that were imported into the country.
A “interested party” for the purpose of submitting a request for investigation or making an evasion allegation is:
- A foreign manufacturer, producer, exporter or wholesaler in the United States of a domestic like product
- A certified union or recognized union or group of workers which are part of an industry engaged in the manufacture, production, or wholesale in the United States of a domestic like product
- A trade or business association whose majority of the members are involved in manufacture, produce, or wholesale a domestic like product in the United States
- An association where in a majority of the members are from the interested parties described above with respect to a domestic like product
- If the merchandise is a processed agricultural product, a coalition or trade association that is representative of processors; processors and producers; or processors and growers.
If you believe that someone is evading AD/CVD duties, you can submit a request for investigation to CBP.
“Interested Parties” in Initiating Investigations
In order to initiate an investigation into possible evasion of AD/CVD orders, any interested party can file an allegation electronically on the CBP portal. The interested party is free to file multiple allegations, each of which must be pointed at one importer. By doing so, they play an important role in ensuring that these orders are enforced.
Who investigates an EAPA allegation?
The CBP will investigate any allegations that a person is trying to avoid paying duties on goods. This will involve a team of CBP employees, which may include, but is not limited to:
- Personnel from the EAPA branch
- Regulatory Audit and Agency Advisory Services
- National Threat Analysis Centers
- Centers of Excellence and Expertise
- Field Offices
The exact composition of the team will depend on the particulars of the allegation.
How to file an EAPA Allegation
Enforcing and protecting your shipment is important, and the Enforce And Protect Act makes it easier to do just that. Filing an EAPA allegation is simple: just go to the EAPA option on the e-Allegations web portal. From there, you can use one of the checklists provided to determine whether you have enough information to proceed.
Business confidential information must be enclosed within single brackets on the first page of the document, which must be marked as “business confidential.” The party submitting the allegation must also provide an explanation as to why the bracketed information is entitled to business confidential treatment. In addition, a public version of that document must be filed in accordance with CBP guidelines.
Benefits of Filing an EAPA Allegation
The Enforce And Protect Act is a law that was created in order to help protect American businesses from unfair competition. The act allows for the creation of a multi-party proceeding, which helps to investigate the evasion of AD/CVD orders. This process is more transparent and information-sharing is improved, which helps to make sure that those who are guilty of evading these orders are held accountable. CBP is empowered with new tools to investigate allegations and authorize the collection of information from the party making the allegations, the importer, the exporter, and even the foreign government. This allows parties being investigated to contest the determination regarding the evasion by requesting an administrative review of the determination with the CBP Office of Trade’s Regulations and Rulings Directorate. Later, a party to that administrative review can file a suit with the Court of International Trade to contest CBP’s determination. This act is helpful in ensuring that American businesses are treated fairly and that those who break the rules are held accountable for their actions.
What is the time frame for an investigation and CBP determination?
The CBP has 90 calendar days to arrive at a formal decision on whether the allegations are valid or not. Generally, the CBP must make a decision on whether AD/CVD duties were evaded, based on substantial evidence, within 300 days after the investigation was initiated. In investigations that are complex and seemingly extraordinary, CBP must decide no later than 360 days after a case is initiated.
Will the business information be protected if an EAPA Allegation is filed ?
All business confidential information submitted to the CBP will remain confidential. This includes any information that is properly identified as being for business purposes only.
Can parties request an administrative review of an Initial determination?
According to Enforce And Protect Act, the interested parties may request for CBP’s review of the decision after precisely 30 business days of evasion. The request must be based upon the facts on record, contain a statement of reasons why the determination should be reversed or affirmed, properly certified, and must be served on other interested parties. CBP will then have 60 business days to complete its review. This act was put into place in order to hold parties accountable and protect those who are shipping.